BUFFALO, N.Y., Oct. 20, 2014 /PRNewswire/ -- Servotronics Inc. (NYSE MKT: SVT) has been ordered to pay more than $5 million for wrongfully terminating its former president and chief operating officer, Nicholas D. Trbovich, Jr.
"This ruling completely vindicates Nick, who was removed suddenly and without justification by Servotronics' Board, breaching a long-term employment agreement between him and the company," explained Trbovich's attorney and Damon Morey Partner Randolph C. Oppenheimer in announcing the results of binding arbitration. "Fortunately, the Board's conduct and behavior were laid bare through these legal proceedings and the decision of the independent arbitrator, whose award and rulings are not subject to appeal."
In his ruling, independent arbitrator Jack P. Levin determined that "the record overwhelmingly supports Claimant's case," referring to Trbovich's wrongful termination claim, stating that "the termination was not final. It was not justifiable." The arbitrator added that if Servotronics "needed to protect itself from a dire threat, not even hinted at by the record in this case, the Board could have formally suspended Claimant from his responsibilities while a proper investigation was conducted," the arbitrator wrote. "That was not even considered. Claimant's termination was a sham."
Servotronics' Board at the time of Trbovich's wrongful termination included directors Donald W. Hedges, 92 and William H. Duerig, 92, as well as Trbovich's father, company founder, Chairman of the Board and CEO Dr. Nicholas D. Trbovich, Sr., 78.
The arbitrator determined that the "Board did not serve its proper function in voting to terminate Claimant. It yielded without inquiry or hesitation to the will of Dr. Trbovich." He added that "the decision to terminate Claimant was only a formality observed by the Board under the guidance of Servotronics outside counsel," Edward C. Cosgrove, "who earlier had been instructed by Dr. Trbovich to arrange for Claimant's termination. The actual termination decision was a fait accompli."
Levin noted that the "Board knew what Dr. Trbovich wanted them to know, and that is murky at best."
On September 29, the independent arbitrator issued his legally binding decision, which is not subject to appeal, ordering Servotronics to pay Trbovich more than $5 million, including: $3.997 million in unpaid wages and compensatory damages, daily interest of 9% APR totaling $700,000 to date and accruing daily, and attorney's fees expected to total about $850,000.
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SOURCE Damon Morey
